simpsons Posted May 12, 2017 Report Share Posted May 12, 2017 Just starting residency in FM in July. Currently have taken out 180k of my LOC through Scotia. I have 120k in student loans. All of the 180k i have taken out of my LOC has actually been passively reinvested in ETFs as i was going through medical school. So far i have made my 180k into around 300k. I was told that Scotia provides 75k additional LOC money for residency. However, after talking to my adviser today, he informed me that i only qualify for 15k since they assume an average of 60k of student loan debt and the 60k extra debt that i have (120-60) reduces my additional LOC amount proportionately. I would prefer to have the extra 60k of LOC available to once again reinvest. Anyone have any experience with banks that dont have this pesky limitation? Thanks Link to comment Share on other sites More sharing options...
Clover_236 Posted May 12, 2017 Report Share Posted May 12, 2017 You could try speaking to an RBC med LOC specialist, they might be more motivated to let you increase your LOC as an incentive to make switching more attractive. I know that $275K is certainly a theoretical possibility at RBC, I don’t have it personally have it but my adviser said it can be done on a case by case basis. Congrats on your trading success btw, that’s amazing gains. Would appreciate any tips/advise for complete newbies in this field! Link to comment Share on other sites More sharing options...
simpsons Posted May 12, 2017 Author Report Share Posted May 12, 2017 Perfect will email my local RBC rep as well and see what i can get. I had a good background in finance from undergrad courses before that helped. However, my investment strategy was stupid simple as i dont think anyone can consistently beat the market unless they have access to insider information. Here is a link i found useful: http://canadiancouchpotato.com/about/ . Cliffs: RRSP: max out on it. Find out your contribution limit from CRA online. TFSA: see above. ETF: best option if you investing 50k+. My two main investments were Vanguard S&P (VFV) and BMO NASDAQ (ZQQ). The returns on both these in the past 3 years have been around 18%. Essentially stock indexes (NASDAQ, S&P, Dow) combine 100-3000 (varies by index) top companies in various sectors and reduce the major volatility that would be experienced if you went all in on one stock. That said, long term you can expect 9% gains (including 2% inflation). The past 4 years were particularly good for the stock market as a whole. My investment strategy was very passive and i didnt make a single trade in the past year. Link to comment Share on other sites More sharing options...
Bambi Posted May 12, 2017 Report Share Posted May 12, 2017 Hey, if you are into risk and investments, there is Apple AAPL, IGM ishares North American Technology, ZLB.TO the BMO Low Volitility Canadian Equity Fund, VIG Vanguard Dividend Appreciation ETF and numerous other ETFs from Vanguard and others that are relatively low cost and allow you to purchase a basket of securities from a given sector. However, the stock market is high risk, there are absolutely no guarantees, it is at an all time high and absolutely anything can happen to the stock market. And then there is Trez Capital Trust, a Canadian mutual fund that invests in development mortgages in Texas and pays out a minimum of 8%, often more, with a 2 year lock up I belive, and a minimum investment of $5,000. Or, Centurion REIT in Toronto that invests in apartment buildings and student residences which has returned something like 10% compounded for several years, with a minimum investment of $25,000 and it is closed to new investments right now. In 1929, everybody, the local barber, etc. borrowed money to invest in the stock market. Then, the crash came along, as the stocks tanked, they could not pay their margin calls and were sold out for pennies. People jumped out of buildings to their deaths or found other ways to commit suicide. Do not invest with what you cannot afford to lose and never invest with borrowed money unless you are prepared for the consequences. Link to comment Share on other sites More sharing options...
simpsons Posted May 12, 2017 Author Report Share Posted May 12, 2017 I am a proponent of investing in multiple sectors than a single one. Bubbles in specific areas burst more often than depressions. Not a fan of mutual funds since they have higher fees and i dont trust them not to get greedy/biased towards specific stocks. Rather invest in all sectors than risk volatility by investing in real estate only for just 10% returns. Anything that you put in the stock market you gotta be prepared to lose though. With 275k @ 2.75% (prime) the interest is ~$600 per month and i can sustain much more than that on a resident salary alone. Link to comment Share on other sites More sharing options...
gsmith Posted May 12, 2017 Report Share Posted May 12, 2017 I am a proponent of investing in multiple sectors than a single one. Bubbles in specific areas burst more often than depressions. Not a fan of mutual funds since they have higher fees and i dont trust them not to get greedy/biased towards specific stocks. Rather invest in all sectors than risk volatility by investing in real estate only for just 10% returns. Anything that you put in the stock market you gotta be prepared to lose though. With 275k @ 2.75% (prime) the interest is ~$600 per month and i can sustain much more than that on a resident salary alone. You should also negotiate the prime -0.25% interest rate that was started at Scotiabank for professional LOC. Link to comment Share on other sites More sharing options...
simpsons Posted May 12, 2017 Author Report Share Posted May 12, 2017 You should also negotiate the prime -0.25% interest rate that was started at Scotiabank for professional LOC. Less than prime? Hmm any link or anecdotes about how/if this can be achieved. Never heard of it personally. Link to comment Share on other sites More sharing options...
JohnGrisham Posted May 12, 2017 Report Share Posted May 12, 2017 Less than prime? Hmm any link or anecdotes about how/if this can be achieved. Never heard of it personally. Most of the banks are doing this now, they should give you prime minus 0.25% to keep your business. Link to comment Share on other sites More sharing options...
Clover_236 Posted May 12, 2017 Report Share Posted May 12, 2017 Less than prime? Hmm any link or anecdotes about how/if this can be achieved. Never heard of it personally. I have prime minus 0.25 from RBC, was very easy to set up, took less than day when I emailed my adviser that some of the other banks are offering this and I would like RBC to match it. So yes, if you're gonna switch to RBC make sure to negotiate for prime minus 0.25. Link to comment Share on other sites More sharing options...
rmorelan Posted May 13, 2017 Report Share Posted May 13, 2017 Less than prime? Hmm any link or anecdotes about how/if this can be achieved. Never heard of it personally. yup indeed it is coming up to be the new standard. Definitely both Scotia and RBC offer it. I have never heard any scotia branch do what your advisor there is suggesting. The jump to 275K is pretty automatic. Plus that argument makes no sense to me at all. I mean you in theory could just sell some of the stock to reduce on paper the debit, then do a lot of hand waving saying "see look the debit is gone" look like the "average student", then get the 275K and immediately buy back the stock from the LOC. Annoying but side tracks everything - since you can do that and they would know that, then it is a pointless exercise. Link to comment Share on other sites More sharing options...
simpsons Posted May 13, 2017 Author Report Share Posted May 13, 2017 Sweet thanks for the help guys! I will ask about the reduced interest rate. I have a meeting arranged with RBC on Monday. Plus that argument makes no sense to me at all. I mean you in theory could just sell some of the stock to reduce on paper the debit, then do a lot of hand waving saying "see look the debit is gone" look like the "average student", then get the 275K and immediately buy back the stock from the LOC. Annoying but side tracks everything - since you can do that and they would know that, then it is a pointless exercise. This doesn't quite apply since they claim that the reason they are not giving me the full 275k LOC is because my student loans are 120k rather than the "standard 60k." The fact that i have used 180k of the 200k available to me is not a factor. Even if i hadnt touched my LOC they would only give a max of 215k (275k-60k). I can pay off my government student loans right away but with only prime+2.5% for up to 14.5 years, I would rather invest it for higher elsewhere (+minimal tax advantage). Link to comment Share on other sites More sharing options...
rmorelan Posted May 13, 2017 Report Share Posted May 13, 2017 Sweet thanks for the help guys! I will ask about the reduced interest rate. I have a meeting arranged with RBC on Monday. This doesn't quite apply since they claim that the reason they are not giving me the full 275k LOC is because my student loans are 120k rather than the "standard 60k." The fact that i have used 180k of the 200k available to me is not a factor. Even if i hadnt touched my LOC they would only give a max of 215k (275k-60k). I can pay off my government student loans right away but with only prime+2.5% for up to 14.5 years, I would rather invest it for higher elsewhere (+minimal tax advantage). ah sorry so it is the other way around. that still doesn't make any sense as I know people with all manner of loans from 0 to 200K at scotia prior to residency - they all have gotten the 275K when they start. What makes you special (in a bad way....) Link to comment Share on other sites More sharing options...
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